Bitcoin Analysis

3:20 p.m. New York time

What’s happening now? Bitcoin futures rose slightly to a new high as it continued a sideways pause that began December 8.

What does it mean? By my primary count, the price is continuing an upward movement within a late-stage uptrend that began March 13, 2020 from 4,210. It has just completed a shallow correction before the final upward push.

What are the alternatives? The rise has met the requirements of that final upward push. However, there is nothing in Elliott wave analysis that requires the final upward move to be truncated. Often such movements can cover a large distance.

[Bitcoin futures at 3:21 p.m., 3-hour bars, with volume]

What does Elliott wave theory say? Today’s high is within wave 3 of Subminuette degree within wave 5 of Minuette degree. The completion of Minuette 5 will cascade up the degrees and will mark the end of wave 5 of Minor degree, which began April 13, 2020.

Fifth waves can be truncated under Elliott, they can trace the normal five waves in the direction of the trend, or they can extend for a large distance. There is no way to know for sure at this point which sort of 5th wave is in the cards.

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

I recommend two books, both by people associated with EWI.

First, Elliott Wave Principle by Robert Prechter and A.J. Frost is the book that, along with Prechter’s analyses, that created the revival of Elliott wave theory. I first read it in 1984, and it has had a profound influenced on my thinking about markets ever since.

Second, I’ve found Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy, both of EWI, to be a useful book that relates Elliott wave theory to practical trading. The authors are hands-on Elliotticians, and for an active trader, that’s exactly what’s needed — less theory and more how-to. The first chapter of the book gives a very nice thumbnail run down of what Elliott wave theory is all about.

Terminology. Here are some links to information about some of the technical jargon I use.

Charts. On my charts, waves have a subscript showing the degree above or below the Intermediate degree. Here are the subscripts and the degree each represents:

  • {+3} Supercycle
  • {+2} Cycle
  • {+1} Primary
  • No subscript: Intermediate
  • {-1} Minor
  • {-2} Minute
  • {-3} Minuette
  • {-4} Subminuette
  • {-5} Micro
  • {-6} Submicro
  • {-7} Minuscule

By Tim Bovee, Portland, Oregon, February 11, 2021


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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